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Robert Irving Burns

RIB Commercial Property Report Q1 2023

March 6, 2023    |   Antony Antoniou - Managing Director

This was a fascinating exercise. I recently sent out a survey to my agency database and was overwhelmed by the response. We were concerned about how some of our many instructions would be received by the market and wanted to test sentiment ahead of launching.
In the end it took on a life of its own and has gained significant interest from the press, industry and clients alike. The survey and resultant story was picked up by the Financial Times and excellently written up by Ian Smith.
What is interesting about our report is the depth across segments and geography. The views are our industry colleagues and not my own.
Personally I am in general optimistic about the market, the UK and real estate in particular as an asset class that said the latest and in my view unnecessary, Bank of England interest rate rise is only going to prolong any pain. It is the fastest tightening of monetary policy in the MPC’s history and with inflation subduing, raw material prices falling, five-year interest swaps dropping, and unemployment rates still historically low (3.7%), there is a real and present risk of stagnation in this sector – wiping up £14billion off of portfolios at the latest estimate from Goldman Sachs

You can download the report in full below but I am also pleased to share some top line numbers below.

Some key findings our colleagues thought:

⭕ Commercial Property price per sq. ft were forecast to drop by 2.9% in Q1 2023

⭕ The Office sector was predicted to see the largest fall in sales prices per sq. ft, at -3.1%

⭕ A ‘buyers’ market’ predicted for the New Year, with supply forecast to increase 1.7%

Our survey of over 8,000 UK commercial agents, forecast that Commercial Property Sales Price Per Sq Ft is set to fall by 2.9% and Rents Per Sq. Ft falling 1.3% on aggregate.

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